PwC: Senate extends probe into consultants as scandal widens

As new revelations emerge, the probe into PwC is likely to extend its timeframe with rivals KPMG, Deloitte and EY set to be grilled too.

Senate extends probe into consultants such as PwC, KPMG, Deloitte, EY as evidence emerges from committee hearings. Picture: Andrew Henshaw/NCA NewsWire

The senate committee inquiry into the management and assurance of integrity by consulting services is poised to extend the number of days it will hear from witnesses after new revelations continue to emerge following the PwC Australia tax leak scandal.

Greens senator Barbara Pocock, who sits on the committee, has sought an extension as new informants come forward and PwC and its Big Four rivals KPMG, Deloitte and EY are likely to be called on to give evidence.

KPMG has already appeared before the inquiry and will probably be called again.

Last week, the committee reversed plans to call PwC in case it compromised any subsequent legal proceedings against the firm following the Australian Federal Police investigation into its use of confidential government information to market its capabilities helping international firms minimise tax.

Ms Pocock said she was “shocked every day” by both PwC and the slow, cumbersome process to issue a “slap on the wrist” punishment of a two-year ban for the partner who shared the confidential information and an ethics course for some PwC staff.

“I am really taken aback by the failure to punish serious (actions). It was unlawful, what happened, and it’s just a pathetic penalty.”

The committee needs more time to consider the actions of the Big Four as a whole, she said.

“I think larger problems about conflicts of interests are really important.”

Senate extends probe into consultants such as PwC, KPMG, Deloitte, EY as evidence emerges from committee hearings. Picture: Andrew Henshaw/NCA NewsWire

So far, PwC has refused to reveal the names of 63 partners and staff that were on emails in which the confidential information was discussed to the public, and only given the committee their names rather than detail on their involvement.

Their obfuscation is costing the firm new work. On Wednesday, the NSW government slapped PwC with a ban on future tax work, as the consulting sector faces a separate probe by the state government.

Ms Pocock said she will be seeking to amend the Tax Agent Services Act 2009 to suspend PwC’s registration as a tax practitioner for two years.

“It’s time for a serious penalty for PwC,” she said. “This egregious ethical failure was not restricted to an individual. There was collusion within the organisation to profit from access to confidential information by helping multinational clients minimise their tax.”

NSW Finance Minister Courtney Houssos said on Wednesday that she was “appalled” by the breach of trust and announced PwC would be temporarily suspended from receiving new taxation work under the government’s professional services scheme.

The moves from NSW follow similar diktats from the federal Department of Finance, which put in place new rules in May requiring departments to consider if consultants they were engaging for works had links to “adverse findings”.

Finance also ordered PwC to stand down all partners at the firm working on government jobs who had received confidential tax briefings leaked by the firms’ former head of international tax Peter Collins.

PwC has benefited from largesse from governments, with the NSW government lavishing $77m in contracts on the partnership in the 2021-22 financial year,

Ms Houssos said existing conflict of interest and confidentiality terms for all professional service engagement as part of the P&MS scheme would also be reviewed and strengthened as part of the moves.